Good medicine for Galen

Friday 12 September 2003 12:06 BST

GALEN HOLDINGS, the Northern Irish drugs group, is burying the hatchet with with its old enemy, Barr Laboratories of America. Barr previously threatened to market cut-price copies of Galen's treatments and proposed a takeover bid.

In a novel move to remove patent expiry problems, Galen is selling Barr its oral contraceptive, Loestrin, which has already lost patent protection.

It will also allow Barr to launch copycat versions of another oral contraceptive, Estrastep, and femhrt, a drug for hormone replacement therapy, six months before their patents expire. In return, Galen gets an option to buy the rights to Barr's generic contraceptive, Ovcon.

Analysts like the deal, which should end costly legal actions - and in the words of Nomura's Frances Cloud - 'de-risks Galen'.